Patisserie Valerie shutting 71 branches while it looks for buyer to save chain

YESTERDAY cake chain Patisserie Valerie has collapsed into administration, putting more than 3,000 jobs at risk.

Today it has released details of 71 branches which will close while the adminstrators look for a buyer to save the chain.

Yesterday, the posh bakery brand said discussions with its lenders HSBC and Barclays to extend a standstill agreement on its debts had failed, leaving it with no option but to appoint KPMG as administrator.

Now it has confirmed that 71 stores - includes 25 concession branches will close, putting 920 out of a a job.

The remaining 122 outlets will continue to trade while a new buyer is found.

The cake firm's parent company Patisserie Holdings has been grappling with the fallout of an accounting fraud since October.

Yesterday it said that the extent of fraud meant it was unable to renew its bank loans and did not have sufficient funding to continue trading.

Chairman Luke Johnson has extended an unsecured, interest-free loan to help ensure that the January wages are paid to all staff working in the ongoing business, the company added.

The loan will also assist the administrators in trading as many profitable stores as possible while a sale process is undertaken.

David Costley-Wood, partner at KPMG and joint administrator, said: “Since our appointment less than 24 hours ago, we have been pleased with the level of interest we have received in the business, and so remain hopeful of achieving a positive outcome.

“In the meantime, we can reassure customers that across the remaining 122 stores, it is all but business as usual.”

Last week, Patisserie revealed KPMG had been hired to carry out a review of all options following the accounting scandal which pushed it close to collapse last year.

It also unveiled the "devastating" extent of irregularities in its books, which included thousands of false entries into the company's ledgers.

The firm said an initial investigation pointed to cashflow and profitability being worse than previously thought when the problem was first discovered in October.

The discovery of a black hole in the company's accounts in October last year pushed it into a crisis which saw it almost cease trading.

A rescue plan was passed by shareholders in November, resulting in the issue of £15 million worth of new shares.

It follows news today that William Hill is planning to close half of its betting shops putting 4,500 jobs at risk. 

Last week M&S announced another round of shop closures as part of a shake-up to the business to make it more profitable. 

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